Mortgage volume ebbs and flows like a tsunami. Sometimes it comes rushing in and business gets heavy and underwriting turn times swell to 2 weeks from 3 days! And then the tide of business eerily rolls back out to sea, and underwriting turn times get normal again.
What if you start a loan process and the loan officer tells that you can easily close a loan and go to settlement in 30 days? But then rates drop and business floods in. The settlement date is in jeopardy of happening on time because the tide of business that came flooding in. And then turn times go way up. Maybe it will take 3 weeks to get the loan to the underwriter instead of 2 weeks. And it will take 2 weeks to underwrite the loan instead of 3 days. Then there is no way a 30 day settlement will happen in this instance.
Not unlike a tsunami, heavy mortgage volume is impossible to control. What if mortgage volume goes up 400%, 500% or 1000%? Mortgage employees can all say, “we are going to try real hard”, and, “we’ll work evenings and weekends.” But, the sad fact is working an extra 20 hours a week which represents a 50% increase in work hours is not going to handle a 400% to 1000% flood of business.
To increase your work hours 5-fold to handle a 5-fold increase in volume, would require you to turn an 8 hour work day into a 40 hour workday. But there are not even 40 hours in a day. So not only is it not humanly possible to work people that hard, there are not enough hours in the day to make them do so. And when things get this busy, you can say that the industry should hire extra help, but who will we hire? There is no one available who is skilled and ready to go. The industry is fully employed. And we can try and poach from other lenders, but they are doing the same to us. It ends up being musical chairs. We can hire and train new people, but that takes too long. So turn times go way up.
When you have an earnest money deposit on the hook, and movers scheduled, and plans made to move, choose a lender carefully. These kinds of changes can be frustrating and costly. At a minimum keep yourself mentally prepared for delays when rates are down as low as they are now which will cause turn times to get very long.
Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.
